* CSI300 -0.2 pct; SSEC -0.2 pct; HSI 0.2 pct
* Investors hopeful that China stocks will be included in MSCI
* Fresh spate of IPOs next week expected to freeze 3 trln yuan
By Samuel Shen and Kazunori Takada
SHANGHAI, May 13 (Reuters) - China stocks dipped on Wednesday as worries over a fresh spate of new share listings offset hopes that mainland shares could soon be included in the MSCI index.
MSCI Inc will announce on June 9 whether to partially include China A shares into its Emerging Markets Index, the index publisher said in a statement on Monday.
“This is a big thing for the China market,” said Wang Yu, analyst at Pacific Securities Co in Beijing.
“If A shares are included, which I think is very likely, many global investors will need to increase exposure to China stocks.”
After surging some 80 percent since November, China stocks have lost some traction in recent weeks on investor concerns over increasing share supplies and fears that regulators could take more action to cool the red-hot market.
Next week, a spate of initial public offerings (IPOs) could lock up some 3 trillion yuan ($483.19 billion) worth of subscription capital, analysts estimate, as regulators move to accelerate IPO approvals.
“Regulators don’t want the market to rise too fast, but there’s little room for the indexes to fall either. So we’re in a consolidation period,” Wang said.
The CSI300 index dipped 0.2 percent to 4,737.96 points. The Shanghai Composite Index was also down 0.2 percent at 4,394.81.
But Hong Kong stocks gained ground. The Hang Seng index added 0.2 percent, to 27,447.48, while the Hong Kong China Enterprises Index rose a similar amount to 13,999.95.
Shenzhen’s Nasdaq-style ChiNext attracted a lot of attention, as the index keeps smashing records despite lofty valuations and repeated warnings by regulators about risks.
The start-up board slumped over 3 percent in early trade but reversed losses to hit another record high.
With the ChiNext trading at an earnings multiple of 118, while the CSI300 is trading at 16 times earnings, the current valuation structure is extremely “distorted,” Cinda Securities Co said in a research report.
Banking stocks dipped as the market diverged over the impact of a government plan to let lenders and local governments use municipal bonds as collateral for borrowing, in an effort to help local authorities manage their massive debts.
Luo Yi, analyst at Huatai Securities, said the scheme would hurt banks’ profitability, but could improve lenders’ asset quality.
Brokerages tumbled on fears of further regulatory tightening, particularly in the business of margin lending. (Editing by Kim Coghill)